Meadow Bay Hits

Napoleon is reputed to have said that he would rather his generals be lucky than skillful under the theory that you can always beat skill but you can never beat luck.

In the summer, Meadow Bay began sort of a no-lose drill program at their Atlanta Gold Mine in Nevada. I was there as they began drilling and I wrote about them about the first of September. I call it no-lose because they had an existing non-43-101 compliant resource of 460,000 ounces of gold and 3.8 million ounces of silver. But those numbers were based on far lower prices for gold and silver. All the company has to do is twin the existing holes and adjust the cutoff grade and they will have a higher resource.

That’s where the luck comes in. When Kinross was drilling the existing resource, they used an RC rig. (Reverse Circulation) In other words, all they got was a bunch of chips to assay. They didn’t get any information about structure. When Bill Reed began his drill program, he insisted on a core rig. The cost is higher per meter but he wanted to fully understand the structure and any feeder zones.

I was there and saw them drilling in July. It appeared to be a pretty standard sheer zone hosted epithermal gold system with about eight ounces of silver for every ounce of gold.

The company released results from holes 4, 6 and 9 last week. They are far more significant than any casual investor would get. Hole four showed an interval of 62.5 meters of 1.63 g/t eAu. That’s giant, not because of the grade but because of the kind of rock they found the gold and silver in. It’s $85 rock for one thing and that’s not bad but it is a porphyry.

Porphyries tend to be big. Shear zone hosted epithermal deposits aren’t necessarily big so when you find a porphyry right next to an epithermal deposit, it is often the source of the mineralization. But adds a lot to the tonnage potential 62 meters is just over 200 feet. They weren’t drilling for a porphyry and now they will have to reexamine their data so they know where they should be drilling. But the real news for investors is that this has just gone from being a nice small potential gold mine into something much more interesting.

More drill results will be out in a few weeks but investors should be looking for longer intercepts as their knowledge of the project increases. Big intercepts in porphyry deposits add ounces in a hell of a hurry.

Meadow Bay is an advertiser and we are biased. Please contact the company if you have any questions and again, investors are always responsible for their own due diligence.